by Bill Singer
Friends And Family Scam Ends With Criminal Complaint
September 20, 2012
On September 19, 2012, Garrett L. "Denny" Denniston, 62, Boothbay Harbor, ME, formerly of Sandy Hook, CT, was arrested and charged in a criminal Complaint in the federal District of Connecticut with wire fraud. Federal prosecutors allege that Denniston defrauded two victims out of $300,000, another two victims out of $400,000, and a fifth victim out of more than $200,000.
NOTE: The charges in a criminalComplaint are merely allegations and the defendant is presumed innocent unless and until proven guilty in a court of law beyond a reasonable doubt. No Indictment has yet been issued.
Bill Singer
The Complaint alleges that Denniston ran his scheme through ConsensusOne LLC and other Consensus companies, which he purported were involved in mergers and acquisitions. Denniston allegedly represented to investors that their money would used to purchase of stock options or promissory notes convertible into a company's stock at a substantial discount to the value of the stock on the date of conversion - adding some urgency to his pitch, Denniston purportedly claimed that the targeted companies were on the verge of being sold or had already been sold in deals that were closing on an accelerated schedule. Further, the offering was presented as a special opportunity for "friends and family" only . . . hey, you know how it goes, I'm only doing this cause we're close and all.
In the event that a potential investor raised concerns about safety, the Complaint alleges that Denniston characterized the investment as refundable in the event that a deal failed to close; moreover, he promised that both he and the Consensus companies guaranteed the investments thus effectively rendering them riskless.
Alas, as with far too many of these riskless gotta-do-it-now deals, the Complaint charges that Denniston diverted a chunk of investors' funds to his personal use rather than the supposed options or notes. If convicted of wire fraud, Denniston faces a maximum prison term of 20 years.
If You Know Something, Say Something: Given the relatively early stage of this case, the Federal Bureau of Investigation is asking victims or those with information about the allegations to contact FBI Special Agent David J. Ford at (203) 382-6645.
Also, see these recent "Street Sweeper" columns: